1/27

No. 10 / March, 2013

Headline News

TAIPEI—Taiwan and the US

yesterday reached consensus on trade

principles for the information and

communication technology (ICT)

service sector as well as international

investments in the seventh

Taiwan-US Trade and Investment

Framework Agreement (TIFA)

meeting.

Vice Minister of Economic

Affairs Bill Cho and Deputy US

Trade Representative Demetrios

Marantis told a press conference that

the two sides agreed to cooperate to

Index

Headline News

Taiwan and US wrap up trade talks ----------------------------------------P.1

Special zones to offer eased restrictions on investment, workers ----------P.3

Joint Meetings, Seminar and Trade & Investment Mission

CIECA Delegation Vistied Italy ----------------------------------------------P.5

CIECA Delegation Vistied Greece ----------------------------------------------P.6

Seminar on Lighting and Photovoltaic Business Opportunities in Turkey

----------------------------------------------------------------------------------P.6

The 27th

CACCI Conference ----------------------------------------------------P.7

Seminar on Portugal Trade and Investment Opportunities ----------------P.9

Guests From Abroad

Province of Special Region Yogyakarta Delegation Luncheon ---------P.10

Dr. Baik-Yong-ki, Chairman of Seoul-Taipei Club and Korean Delegation

to visit the Republic of China(Taiwan) ---------------------------------------P.11

Minister of Ministry of Economy of El Salvador visits CIECA ---------P.12

Economic News ---------------------------------------------------------------P.13

Activity Report ---------------------------------------------------------------P.24

An Outline of Republic of China’s Economics ---------------------------P.25

World Brand of Taiwan Origin ---------------------------------------------P.27

CIECA News Letter

Taiwan and US wrap up trade talks

2/27

enhance domestic regulatory capacity

and support the expansion of ICT

networks and services.

Under the joint statement on

trade principles for the ICT service

sector, Taiwan and the US agreed to

share information and experience

with each other on legislation,

regulations and programs in areas

relevant to promoting the ICT service

sector.

A consensus was also reached on

“political commitments” to ensure

sustained bilateral trade and

investment, with the two

governments agreeing to create an

open and non-discriminatory

investment climate, and supporting a

fair market in which state-run

enterprises will not enjoy preferential

treatment.

Cho said the principles for

international investments are

expected to enhance bilateral trade

ties, create jobs, enhance economic

growth and intensify promotion of a

“Taiwan-US Investment Agreement.”

Marantis said the US recognized

Taiwan has a strong interest in

signing a free-trade agreement (FTA)

with the US and joining the

Trans-Pacific Partnership (TPP), a

proposed free-trade agreement aimed

at liberalizing economies in the

Asia-Pacific region and fostering

international trade.

Taiwan cannot be “invited”

unilaterally by the US to join the TPP,

but must prove it can meet

obligations affecting the interests of

12 current member economies

including the US, he said.

Marantis also said the US had

raised the issue of importing more

US meat products to Taiwan, but did

not win support from Taiwan’s

representatives, because of the

Taiwanese government and its

citizens’ concerns that US meat

products may contain residues of the

livestock feed additive ractopamine.

“We understand this is a

longstanding concern of Taiwanese,

but we will continue promoting the

trade of US meat products and

proving the quality of our product is

consistent with international

standards,” he said.

3/27

The US representative avoided

specifying that he was referring to

pork, and talked about “meat

products” throughout. Cho did not

comment on the issue.

The two sides have agreed to

schedule the eighth round of TIFA

talks next year in Washington,

Marantis said, adding that the US

expects future talks to be an annual

event.

The Ministry of Economic

Affairs will establish two sections for

talks under TIFA to negotiate with the

US about solutions to technical

barriers to trade and bilateral

investment, Cho said.

He added that the government

would seek further assistance from

the US on access to the TPP and

would liberalize laws and regulations

to try to meet its requirements. (Mar.

11, The Taipei Times)

TAIPEI, Taiwan -- Fewer

restrictions on the flow of foreign

investment, workers and information

are among the main attractions of the

highly anticipated free economic

demonstration zones, the Cabinet

announced yesterday.

According to Council for

Economic Planning and

Development (CEPD) Minister Kuan

Chung-ming, the government has

acknowledged that Taiwan's service

and manufacturing sectors face

challenges from more competitive

markets abroad.

Taiwan has gone through

different stages of liberalization in

the past few decades, bringing

favorable changes for the country's

economy, Kuan said. Further

liberalization can bring even more

foreign investment, creating new jobs

and upgrading the country's industrial

structure toward more value-added

products, he said.

The government has set its sights

on five free trade port zones —

Keelung Harbor, Taipei Harbor,

Kaohsiung Harbor, Taichung Harbor

and Suao Harbor — and Taoyuan

Aerotropolis to begin this

transformation.

Special zones to offer eased

restrictions on investment, workers

4/27

Kaun said that the free economic

demonstration zones will not be

limited to these regions, which will

only act as a starting point. The first

zones should be launched between

April and July, he said.

According to Kuan, the free

economic demonstration zones will

seek to develop high-value added,

service-oriented industries, and to

strengthen manufacturing sectors that

can in turn promote the development

of service industries.

Kuan said that although it is too

early to give accurate forecasts for

the results from the expansion of

these areas, he hopes that the zones

can bring in trillions of New Taiwan

dollars in production value within

two years, compared to the current

annual figure of NT$500 billion. He

also said the government hopes to see

the current 110 enterprises expand to

more than 200.

Government Incentives

To spur the development of the

free trade zones, the government has

drawn up some incentives to lure

foreign investment, in particular

loosening restrictions on the influx of

foreign workers and lifting some tax

regulations.

The government plans to ease

restrictions on white-collar foreign

workers who wish to work in Taiwan,

reducing their Taiwan-based income

tax and their foreign earned income

tax.

For companies that wish to

establish operational headquarters in

Taiwan, the government is offering

an income tax cut of 7 percent for the

first three years. The normal income

tax currently stands at 17 percent.

Other incentives include tariff

cuts, commodity tax cuts and sales

tax cuts on imported raw materials.

Four Key Points in Development

In creating the zones, the

government plans to focus on four

key points — the development of

fourth-party logistics, creating

value-added agricultural products,

promoting international medical

tourism, and fostering collaboration

among different industries.

5/27

Citing Taiwan's favorable

geographic location and top-quality

air and water infrastructure, Kuan

said that the country possesses traits

suitable to becoming a fourth-party

logistics provider — an integrator

that assembles the resources,

information and technologies of

supply chains.

With the expansion of cloud

technology, Kuan said that Taiwan is

sure to connect cross-country,

cross-industry value chains to

provide the best network for

enterprises.

As for value-added agricultural

products, Kuan said that Taiwan's

sophisticated skills in

agro-processing offer a good

opportunity to create an

internationally recognized

agricultural product brand.

Through the promotion of

Taiwan's world-class medical staff

and technology, the government is

confident that it can attract a large

number of overseas visitors for

medical or cosmetic tourism. (Mar.

28, The China Post)

Joint Meetings, Seminar and Trade

& Investment Mission

CIECA, in cooperation with the

Bureau of Foreign Trade, Ministry of

Economic Affairs, organized a

business delegation to visit Rome,

Italy on March 3-6. During the visit,

CIECA delegation attended the B2B

match making meeting arranged by

the Confederation of Italian Industry

to further explore business

opportunities with Italian companies.

The delegation also paid courtesy

calls at Unicredit Bank,

Finmeccanica Group Service,

SELEX ES, Confcommercio to

discuss issues of mutual interests and

to strengthen the economic relations

between Taiwan and Italy.

CIECA delegation attend the B2B meeting

organized by Confindustria

CIECA Delegation Visited Italy

6/27

The delegates pay a visit to Confcommercio

A business delegation jointly

organized by the Bureau of Foreign

Trade and CIECA visited Greece on

March 6-10. The seminar and B2B

match making meeting organized by

Athens Chamber of Commerce and

Industry offered the members of the

delegation a valuable opportunity to

better understand the future

development of various industries,

namely food, Biotechnology,

Photovoltaic, and semiconductor. The

courtesy calls at the Ministry of

Development, Union of Hellenic

Chamber of Commerce, Hellenic

Federation of Enterprises, Intralot,

and Piraeus Container Terminal S.A.

also enable the delegates to gain

comprehensive overviews of the

economic situations and business

environment in Greece.

CIECA delegation participate in the

seminar organized by Athens Chamber of

Commerce and Industry

CIECA delegation call on Minister

Konstantinos Chatzidakis, Ministry of

Development

At the invitation of CIECA, Mr.

Fahir Gök, Chairman of Lighting

Fixture Manufacturers Association of

Turkey and Dr. Şener Oktik,

Chairman of Turkish Photovoltaic

Industry Association visited Taiwan

from 11th

to 16th

of March. During

their stay in Taiwan, CIECA staff

CIECA Delegation Visited Greece

Seminar on Lighting and Photovoltaic

Business Opportunities in Turkey

7/27

accompanied Mr. Gök and Dr. Oktik

to visit Taiwan Lighting Fixture

Export Association, Taiwan LED

Lighting Industry Association, AU

Optronics Corporation, Big Sun

Energy Technology Inc., All Real

Technology Co., Ltd., Telecom

Technology Center, Leotek

Electronic Corportation and Topcell

Solar International Co., Ltd.

CIECA also organized a Seminar

on Lighting and Photovoltaic

Business Opportunities in Turkey on

March 12. The Seminar was

chaired by CIECA Chairman C. Y.

Wang. Both Mr. Fahir Gök and Dr.

Şener Oktik gave a presentation on

Lighting and Photovoltaic Industry &

Business Opportunities in Turkey so

that the participants could have a

better understanding of the Business

Opportunities in Turkey. CIECA

also invited two local experts, Dr.

Jon-Lian Kwo, General Manager, All

Real Technology Co., Ltd., and Mr.

Ching-Yuan Lin, Vice Chairman of

Taiwan Lighting Fixture Export

Association share their experiences

on how to do business in Turkey.

Mr. C. Y. Wang, Chairman of

CIECA led a delegation to attend the

27th CACCI Conference in Cebu,

Philippines on March 13 to 16. With

the theme “Asia Pacific: Catalyst to

Global Recovery”, the conference

was attended by approximately 494

participants from 20 countries. The

Taiwan delegation was composed of

prominent business leaders, namely

Dr. Steve Hsieh, Convener of Board

of Supervisors of CIECA and Vice

Chairman of Chinatrust Financial

Holding Company ； and Mr.

Liang-Tung Fan, Secretary General

of Chinese National Association of

Industry and Commerce, Taiwan

(CNAIC). Dr. Cheng-Mount Cheng,

President of Taiwan Academy of

Banking and Finance was one of the

speakers in the plenary session. Dr.

Gwo-Jiunn Huang, Fellow of

Institute for Information Industry

The 27th

CACCI Conference

8/27

chaired the breakout session of Asian

ICT Council.

Mr. C. Y. Wang, Chairman of CIECA

speaks at the 82th CACCI Council Meeting

of the 27th

CACCI Conference.

The Conference deliberate on

various topics, including “The Euro

Debt Crisis and its Implications for

Asian Business” ， “Sustainable

Energy Resources and Food

Security”，“The Impact of Bilateral

Agreements on Regional Trade and

Investments”，“The Role of Women

and Youth in Economic

Development” ， and “Trade,

Investment and Tourism

Opportunities in the Philippines and

in Cebu.” Furthermore, the 82nd

CACCI Council Meeting approved

the proposed amendment of the

CACCI Constitution by setting the

total number of CACCI Vice

Presidents to such figure as may be

prescribed by the Council and the

nomination of Mr. Pradeep Kumar

Shrestha, Past President of the

Federation of Nepalese Chambers of

Commerce and Industry (FNCCI) as

additional Vice President responsible

for Trade Facilitation. The 28th

CACCI Conference will be held in

Kuala Lumpur in 2014 and the 29th

CACCI Conference will be held in

New Delhi in 2015.

Mr. C. Y. Wang, Chairman of CIECA,

participates in the 27th

CACCI

Mr. Jejomar Binay, Vice President of the

Republic of the Philippines addressed in the

27th

CACCI Conference.

9/27

Taiwan delegation pose for group photo

with CACCI Vice Presidents Mr. Jemal

Inaishvili（1st person from left） and Mr.

Pradeep Kumar Shrestha（2nd

person from

right）

Winners of Beauty Contests of the

Philippines celebrate the Gala Dinner of the

27th

CACCI Conference on March 15.

At the invitation of CIECA, Mr.

Jorge Pais, Vice President of

Association of Industrial Portuguese

(AIP), visited Taiwan from March 17

to 22. The aim of the visit is to

enhance the cooperative relations

between the ROC and Portugal.

CIECA organized a Seminar to help

promote Portugal Trade and

Investment Opportunities to local

business communities on March 19.

CIECA Vice Chairman Dr. Han- Sun

Chien and AIP Vice president Pais

signed a MOU during the seminar to

further strengthen the bilateral

economic relationship between two

countries. During the 6-day visit

CIECA made arrangement for Vice

President Pais to call at Department

of European Affairs, Ministry of

Foreign Affairs (MOFA); Hsinchu

Science Park Administration; Bureau

of Foreign Trade, Ministry of

Economic Affairs (MOEA); Small

and Medium Enterprise

Administration, MOEA; Chinese

National Federation of

Industries(CNFI); Importers and

Exporters Association Of Taipei;

Taiwan External Trade Development

Council(TAITRA); Industrial

Technology Research Institute (ITRI);

and some related companies.

Seminar on Portugal Trade and

Investment Opportunities

10/27

Witnessed by Ms. Cynthia Kiang , Deputy

Director General of Bureau of Foreign

Trade, CIECA Vice Chairman Han-Sun

Chien and AIP Vice President Jorge Pais

sign MOU

Guest From Abroad

Sri Sultan Hamengkubuwono X,

Governor of Province of Special

Region Yogyakarta, led a 12-person

delegation to visit Taiwan from

March 7 to 10, 2013. The delegation

participated in the Yogyakarta Trade

and Investment Fair in the morning

of March 7. Besides assisting in

inviting Taiwanese companies to

attend the fair, Dr. Steve Hsieh,

Convener of Board of Supervisors of

CIECA, hosted a luncheon in honor

of the delegation at Sheraton Taipei

Hotel. Several officials and staff

members of Indonesian Economic

and Trade Office to Taipei were

invited to join the lunch, including

Mr. Ahmad Syafri, Representative；

Mr. Suhirto, Deputy

Representative；Mdm. Dina Setiawati

Boediman, Director of Investment

Dept.；Mr. R. Janu Suryanto, Director

of Industry Dept. Local guests

attended the luncheon were Mr.

Benjamin Ho, Director General of

Department of East Asian and Pacific

Affairs, Ministry of Foreign

Affairs；Mr. Yi-Cheh Chou , Director

General of Department of

Investment Services, Ministry of

Economic Affairs；Mr. Jack Lee,

President Commissioner of PT Bank

Chinatrust Indonesia；Mr. Peter Liu,

SVP of Chinatrust Commercial

Bank； Dr. Sha Miao, Professor of

Department of Aquaculture of

National Taiwan Ocean University；

Mr. Robert Ou-Young, President of

Anko Food Machine Co., Ltd.；Ms.

Christine Chou, Sales Deputy

Manager of Speedtech Corporation；

Mr. William Hsu, First Secretary of

Taipei Economic and Trade Office in

Indonesia；and Ms. Vicky Chung,

Operation Manager of Green Master

Province of Special Region

Yogyakarta Delegation Luncheon

11/27

International Freight Services Ltd.

Mr. Benjamin Ho(From left), Director

General of Department of East Asian and

Pacific Affairs of MOFA, Sri Sultan

Hamengkubuwono X, Mrs. Gusti Kanjeng

Ratu Hemas, wife of Sri Sultan

Hamengkubuwono X, and Mr. Yi-Cheh

Chiu, Director General of Department of

Investment Services of MOEA, chatted

during the luncheon.

A great friend of the ROC, Dr.

Baik Yong-ki, Chairman of the Seoul

Taipei Club, has dedicated a great

deal of time and energy to promoting

overall substantive relations between

Taiwan and Korea over the years.

Dr. Baik led a large Korean

Delegation to visit Taiwan from

March 10 to 13 this year. In

recognition of his efforts and

contributions to promoting and

strengthening friendly and

cooperative relations between the two

countries, the Legislative Yuan and

the Ministry of Foreign Affairs of

ROC confer him the Congressional

Diplomacy Honorary Medals and the

Friendship Medal of Diplomacy

respectively. Mr. Jeffrey Koo, Jr.,

Vice Chairman of CIECA, also

hosted a luncheon at Ambassador

Hotel Taipei in honor of the

delegation on March 11. Dr.

Chih-Kang Wang, Chairman of

TAITRA; Dr. Steve Hsieh, Chairman

of Taiwan Lottery; Dr. Ming-Teh Lin,

Vice Chairman of Taipei-Seoul Club;

Mr. Sang-Ki Chung, Representative

of Korean Mission in Taipei; Ms.

Young Shil Kim, Assistant

Representative of Korean Mission in

Taipei; Amb. Chi-Tai Feng, Advisor

of Chinatrust Commercial Bank; Mr.

Paul C.F. Wang, Chief Secretary of

Bureau of Foreign Trade, MOEA; Mr.

Mike Chiang, Chairman of ISTRA

Corporation; Dr. To-Hai Liu,

Director of Center for WTO Studies,

NCCU; Mr. Chiao-Chang Huang,

Vice Chairman of Importers and

Exporters Association of Taipei; and

Ms. Jackie C.P. Lee, Executive

Dr. Baik-Yong-ki, Chairman of

Seoul-Taipei Club and Korean

Delegation to visit the Republic of

China(Taiwan)

12/27

Director of Huang Lung Eng. Co.,

Ltd. were also present at the

luncheon.

The luncheon in honor of Dr. Baik Yong Ki,

Vice Chairman of Seoul Taipei Club and

Korean Delegation. Vice Chairman Jeffrey

Koo, Jr. makes welcome remarks.

Mr. Jeffrey Koo, Jr., Vice Chairman of

CIECA presents gift to Dr. Baik Yong-Ki

Dr. Baik Yong-Ki presents gifts to Mr.

Jeffrey Koo, Jr.

Hon. Jose Armando Flores

Aleman, Minister of Ministry of

Economy of El Salvador and his wife

called on Mr. C. Y. Wang, Chairman

of CIECA, on March 28, 2013 to

exchange views on ways to

strengthen bilateral economic

cooperation and to promote

commercial interaction between the

two countries.

Minister of Ministry of Economy

of El Salvador visits CIECA

13/27

Economic News

(A) Exports

Taiwan’s exports reached US$

27.23 billion in March, up 38% from

the previous month, and also up 3.3%

when compared with the same month

last year.

(B) Imports

Taiwan’s imports reached US$

24.03 billion in March, up 27.7%

from the previous month, and also up

0.2% when compared with the same

month last year.

(C) Trade surplus

The trade surplus in March was

US$ 3.2billion, a decrease of 19.9%

over the same month last year.

Major Economic Index

% Change on

previous year

2012 2013

Jan Feb Mar

GDP 1.25 3.53 3.26 -

CPI 1.93 1.15 2.97 1.39

Unemployme

nt rate

4.24 4.16 4.24 -

Export -2.32 21.6 2.1 3.3

Imports -3.81 22.4 5.7 0.2

Export orders 1.1 18 -14.5 -

Industrial

production

-0.1 19.17 -11.4 -

Monetary

aggregate

4.17 2.99 3.53 -

(M2)

Stock

Market*

7,475 7,759 7,932 -

(Source: Ministry of Finance &

Council for Economic Planning and

Development)

TAIPEI--The Council for

Economic Planning and

Development (CEPD), Taiwan's top

economic planner, has set a target of

raising the country's gross domestic

product (GDP) growth to 3.8 percent

in 2013, according to the latest

economic development paper

released by the council Saturday.

As the global economy is on the

way to recovery, the domestic

economic fundamentals are staging a

rebound, prompting the CEPD to

become more upbeat about the local

economic climate.

In 2012, Taiwan's economy grew

by only 1.26 percent from a year

earlier, easing from an annual

increase of 4.07 percent recorded in

2011, largely because of weak global

demand.

Summary of Exports and

Imports for March 2013

CEPD targets 3.8% economic

growth in '13

14/27

However, the Directorate

General of Budget, Accounting and

Statistics (DGBAS) has forecast

Taiwan's GDP growth will hit 3.59

percent for 2013, citing an increase in

exports and private consumption as a

reason.

The DGBAS even raised its

forecast of Taiwan's 2013 GDP

growth from the previous estimate of

3.53 after the country posted

better-than-expected economic

growth in the fourth quarter of 2012.

The DGBAS said momentum is

likely to continue into this year.

According to the CEPD paper,

the council aims to improve the local

investment environment, speed up

the pace of an industrial upgrade,

push for development in the rural

areas to strengthen the overall

economic structure and eventually hit

its GDP growth target.

According to the CEPD paper,

the council has also set a target of

US$21,412 (NT$633,795) in per

capita GDP for 2013, up from

US$20,378 recorded in 2012, while

the jobless rate is expected to fall to

4.1 percent from 4.24 percent a year

earlier.

The council has also set a goal of

keeping Taiwan's inflation within 2

percent this year. In 2012, Taiwan's

consumer price index rose 1.93

percent from a year earlier.

Regarding attracting more

investments in Taiwan, since

November 2012, the council said the

government has approved 24

investment projects filed by

Taiwanese investors operating

overseas. The companies plan to pour

NT$172.4 billion (US$5.82 billion)

into the country, and once the

projects are realized, the investments

are expected to add about 26,000 jobs

in the local market, according to the

council.

Kuan Chung-ming, head of the

CEPD, is scheduled to attend an

economic sub-committee of the

Legislative Yuan on March 11 to

report the economic development

paper and take questions from

lawmakers. (Mar. 10, The China

Post)

15/27

Brussels--Today the last deadline

to phase out animal testing for

cosmetic products in Europe enters

into force. As of today, cosmetics

tested on animals cannot be marketed

any more in the EU.

A Communication adopted by

the Commission today confirms the

Commission's commitment to respect

the deadline set by Council and

Parliament in 2003 and outlines how

it intends to further support research

and innovation in this area while

promoting animal welfare

world-wide.

European Commissioner in

charge of Health & Consumer Policy,

Tonio Borg, stated: "Today's entry

into force of the full marketing ban

gives an important signal on the

value that Europe attaches to animal

welfare. The Commission is

committed to continue supporting the

development of alternative methods

and to engage with third countries to

follow our European approach. This

is a great opportunity for Europe to

set an example of responsible

innovation in cosmetics without any

compromise on consumer safety."

The Commission has thoroughly

assessed the impacts of the

marketing ban and considers that

there are overriding reasons to

implement it. This is in line with

what many European citizens believe

firmly: that the development of

cosmetics does not warrant animal

testing.

The quest to find alternative

methods will continue as full

replacement of animal testing by

alternative methods is not yet

possible. The Communication

published today outlines the

Commission's contribution to the

research into alternative methods and

the recognition that these efforts

must be continued. The Commission

has made about EUR 238 million

available between the years 2007 and

2011 for such research. The

cosmetics industry has contributed as

well, for example by co-funding the

SEURAT1 research initiative with

EUR 25 million.

The leading and global role of

Europe in cosmetics requires

Full EU ban on animal testing for

cosmetics enters into force

16/27

reaching out to trading partners to

explain and promote the European

model and to work towards the

international acceptance of

alternative methods. The

Commission will make this an

integral part of the Union's trade

agenda and international

cooperation.

Background

Directive 2003/15/EC introduced

provisions in relation into animal

testing into the Cosmetic Directive

76/768/EEC. Accordingly, animal

testing in the Union is already

prohibited since 2004 for cosmetic

products and since 2009 for cosmetic

ingredients ('testing ban'). As from

March 2009, it is also prohibited to

market in the Union cosmetic

products containing ingredients

which have been tested on animals

('marketing ban'). For the most

complex human health effects

(repeated-dose toxicity, including

skin sensitisation and carcinogenicity,

reproductive toxicity and

toxicokinetics) the deadline for the

marketing ban was extended to 11

March 2013. (Mar. 11, The

European Commission)

Taipei is well-positioned to

develop into an offshore yuan trading

center, given its trade links with

China, but it needs to boost its

international image to attain the

status, Standard Chartered Bank chief

executive Peter Sands said in Taipei

yesterday.

Sands made the comments while

attending an economic summit in

Taipei co-sponsored by the British

bank and the Financial Times.

Taipei can benefit from the yuan’s

internationalization as cross-border

trade is increasingly settled in the

Chinese currency — jumping to 12.6

percent last year, from 5 percent in

2010, Sands said.

Although it will take a while for

the yuan to become a major reserve

currency, its rising importance is

evident, thanks to growing regional

trade, he said.

Taiwan, which ships 40 percent

of its exports to China, could save

Taiwan favorably positioned as yuan

trading hub: bank

17/27

significant foreign currency exchange

costs if exporters use yuan to settle

trade, Sands said.

That gives Taipei an advantage

in building an offshore yuan trading

market, in addition to its strength in

technology and innovation, he said.

In comparison, Hong Kong has a

history as an international financial

center, while Singapore is developing

into a regional wealth and

asset-management hub, Sands said.

However, Taipei needs to bolster

its image as an international financial

center, he said, adding that

Taiwanese companies should invest

on increasing their profile, marketing

and branding.

Taiwan could also make more

effort to strengthen its creative

industries, as South Korea has

succeeded remarkably in doing in

recent years, Sands said..(Mar. 15,

The Taipei Times)

Taiwan and India have signed a

carnet protocol allowing temporary

duty free admission for goods that

will later be taken out of the

country, a boon for organizers of

trade shows and other activities,

Taiwan External Trade

Development Council (TAITRA)

said March 20.

The agreement, signed by

TAITRA and the Federation of

Indian Chambers of Commerce and

Industry March 20 in New Delhi, will

be implemented as soon as the

respective countries have put

procedures in place, boosting

bilateral commercial and cultural

exchanges.

India is the 43rd country to sign

such an agreement with Taiwan, after

negotiations began in 2004. TAITRA

President and CEO Chao Yuen-chuan,

who signed the protocol with FICCI

Senior Vice President Sidharth Birla,

said these arrangements effectively

help Taiwan companies explore

overseas business opportunities.

Such an agreement means that

all materials, display products and

samples destined for use in trade

shows or similar activities can be

brought into the partner country

Taiwan, India ink commercial goods pact

18/27

without paying customs duties,

provided such goods will be taken

back out again.(Mar. 21, Taiwan

Today)

Malaysia-The island spat and

security issues which recently

surfaced between North Asian

countries will not be a threat to the

Regional Comprehensive Economic

Partnership (RCEP), says Asean

grouping.

Asean deputy secretary-general

Lim Hong Hin said the first round of

negotiations will go on as scheduled

in May and targeted to conclude by

2015 – when the Asean Economic

Community (AEC) takes

shape.

“What is positive is the 16

leaders came together in Phnom Penh

last year to launch RCEP. If there is a

security issue, they would not have

gone ahead,” he said at a media

briefing after the launch of the ACIA

guidebook for businesses and the

handbook for investment promotion

agencies yesterday.

"Despite the tension between

China, Japan and Korea at the

summit, they are forging ahead

toward a free trade area... so, we are

progressing.”

International Trade and Industry

Minister Datuk Seri Mustapa

Mohamed also said that these issues

would not derail the process.

The RCEP, which involves Asean,

China, Japan, South Korea, India,

Australia and New Zealand will bring

together the leading economies in

Asia with a population of 3.4 billion

people, combined gross domestic

product (GDP) of US$17.23 trillion

and representing 43.9 per cent of

world trade.

Lim said the Asean grouping

already has five bilateral free trade

agreements (FTAs) with China, Japan,

South Korea, India, Australia and

New Zealand, providing building

blocks to work on.

He also said the RCEP is not

competing with the Trans Pacific

Partnership as both multilateral trade

pacts are trying to serve building

RCEP to go on amid tension

19/27

blocks for the region although the

levels of ambition vary.

“In RCEP, we have a platform to

build on with 16 countries, and we

also aim to conclude by end of 2015

together with the AEC and then we

open to the rest of the world to come

on board.”

The TPP, which has 11 countries

on board, wants to include the

remaining 10 economies under the

Asia-Pacific Economic Cooperation

(APEC) grouping before opening to

the rest of the world.

“The biggest advantage we have

is a platform to start as we already

have bilateral FTAs and we can draw

the line to move upward.”

Lim also stressed that that the

ACIA has to work.

As global uncertainties continue

to under mine the stability of the

financial markets and economic

growth, the ACIA will be needed to

restore confidence in the region.

“The ACIA grants immediate

benefits to both Asean investors and

Asean-based foreign investors

through non-discriminatory

treatment.” (Mar. 22, The Business

Times)

China, Japan and South Korea

began formal negotiations yesterday

on securing a free-trade agreement

(FTA) to bind together three

economies that account for about 20

percent of global GDP.

With all three countries under

new leadership, trade officials hope

they can move beyond damaging

territorial disputes that have dogged

relations for decades.

The idea of a trilateral FTA has

been on the table for decades, but

diplomats say China is now pushing

especially hard for a pact, in part as a

counter to US initiatives in Asia.

Washington is leading

negotiations on a Trans-Pacific

Partnership (TPP) FTA that some see

as part of the so-called US “pivot” —

aimed at reaffirming the US role in

Asia in the face of China’s economic

rise.

The TPP talks currently involve

S Korea, China and Japan open talks

on free-trade deal

20/27

Australia, Brunei, Canada, Chile,

Malaysia, Mexico, New Zealand,

Peru, Singapore, the US and

Vietnam.

While China is conspicuously

absent, new Japanese Prime Minister

Shinzo Abe announced earlier this

month Japan’s decision to participate

in the negotiations.

The initial round of trilateral FTA

talks is being held in Seoul, after

which the negotiations will move to

China, followed by a third round in

Japan, South Korean trade officials

said.

China, Japan and South Korea

are now Asia’s largest, second-largest

and fourth-largest economies, while

trade volume between them

amounted to US$690 billion in 2011.

Among other issues, the

discussions are expected to hit

opposition from Japanese and South

Korean farmers worried about an

inflow of cheaper agricultural

products, such as Chinese rice.

“Farmers are already suffering

more difficulties due to Seoul’s

free-trade pacts with the European

Union and the United States,” the

Korean Advanced Farmers

Federation said in a statement.

The federation threatened to

launch an anti-government campaign

if South Korea pursues the FTA with

China and Japan, but the main hurdle

lies in the form of bitter,

long-standing territorial disputes that

have raised diplomatic and military

tensions, and hampered economic

cooperation.

China and Japan are arguing

about sovereignty over the Diaoyutai

Islands in the East China Sea, also

claimed by Taiwan, while Japan and

South Korea have a historic dispute

over ownership of islands in waters

between the two countries.

The first round of talks between

deputy trade ministers in Seoul is set

to last three days and “will involve

no practical negotiations,” a South

Korean official said. “It will cover

broad matters, such as the scope,

agenda and procedure for further

negotiations.” (Mar. 27, Taipei

Times)

21/27

BEIJING--Manufacturing

activity across Asia expanded in

April, widely watched barometers

showed Monday, suggesting that the

region's export-dependent economies

were continuing to recover.

China's official purchasing

managers' index (PMI) hit 50.9 in

March, its highest since April 2012

when the figure stood at 53.3,

according to the National Bureau of

Statistics and the China Federation of

Logistics and Purchasing.

The PMI is a widely watched

indicator of economic health, with a

reading above 50 suggesting

expansion while anything below

points to contraction.

British bank HSBC, whose

survey focuses more on smaller

enterprises than the official data, said

its final PMI stood at 51.6 in March,

up from 50.4 in February, when the

reading dipped to its lowest since

October.

“China's recovery continues,

mainly driven by the gradually

improving domestic demand

conditions,” said Qu Hongbin, a

Hong Kong-based economist with the

bank, in a statement.

HSBC's PMI readings for many

other Asian economies all improved

in the month, with Vietnam hitting a

23-month high of 50.8.

South Korea saw its strongest

figure for a year, reaching 52.0

thanks to solid increases in output

and new orders as demand from

China and Japan was strong, HSBC

said.

In Taiwan, the PMI climbed to

51.2 in March, the fourth consecutive

month of improvement and up from

50.2 in February, on the back of new

orders from both home and abroad

continuing to rise.

HSBC's index for Indonesia

reached a four-month high of 51.3,

from 50.5 in February, underpinned

by a faster expansion in new orders

and a slight increase in production,

the bank said.

Asia manufacturing picks up in March

in latest sign of recovery

22/27

India's figure was also positive at

52.0 in March, although that was the

lowest reading for 16 months and

down from 54.2 in February, as

repeated power cuts weighed on

activity.

Speaking of the latest data CIMB

head of research Song Seng Wun told

Dow Jones Newswires: “It paints a

story of modest recovery rather than

an all-out, straight line

all-guns-blazing story, which would

have pleased the market more.”

Qu said that Beijing may keep to

relatively loose monetary policy to

boost growth as inflationary

pressures were easing, with input

prices falling and the economy

suffering from “lingering external

headwinds” — an apparent reference

to the eurozone's woes and the

sluggish U.S. recovery.

China's economy expanded 7.8

percent last year, its lowest annual

figure since 1999, in the face of

weakness at home and in key

overseas markets.

But it grew 7.9 percent in the

final three months of 2012 from a

year earlier, snapping seven straight

quarters of slowing growth.

However, government figures

pointed to a slowdown in retail sales

growth in February, suggesting the

budding recovery may be fragile.

Inflation in China hit a 10-month

high of 3.2 percent in February, up

from January's 2 percent, as holiday

season spending and rapid credit

growth accelerated price rises. (Apr.

2, The China Post)

Taiwan and China yesterday

made a significant breakthrough in

easing market access rules for banks

seeking to own stakes in peers or

expand their presence across the

Taiwan Strait.

A consensus was reached after a

closed-door meeting in Taipei

between Financial Supervisory

Commission (FSC) Chairman Chen

Yuh-chang and China Banking

Regulatory Commission (CBRC)

chairman Shang Fulin.

The new rules, if approved, will

allow individual Chinese lenders to

New rules for cross-strait banking

discussed

New rules for cross-strait banking

discussed

23/27

own up to 10 percent of listed

financial holding companies in

Taiwan, from the current 5 percent,

Banking Bureau Director-General

Kuei Hsien-nung said.

The stake may not exceed 15

percent once shares obtained through

the open market by Chinese

institutional investors are also

factored in, compared with the

present cap of 10 percent, Kuei said.

The limit for Taiwanese unlisted

financial holding companies and

banks is set at 15 percent and at 20

percent for banking subsidiaries of

financial holding firms, he said.

“Chinese investors may choose

to invest in financial holding

companies or banking units, but not

both,” Kuei told reporters on behalf

of the FSC.

The investment easing measures

still need to undergo legal review and

be approved by authorities on both

sides. If they pass, they would allow

Chinese lenders to forge partnerships

with Taiwanese banks, said Fan

Wenzhong , head of the international

department at the Chinese banking

commission.

In addition, Taiwan and China

agreed to lift the requirement that

banks must have five years of prior

operational experience in advanced

economies to qualify to set up

branches in bilateral markets, Kuei

said.

Chinese banks with branches in

Taiwan would be allowed apply to

set up new branches and conduct

offshore banking, Kuei said, adding

that China UnionPay Co, China’s

only credit card network, would also

be allowed also file an application to

establish a branch here.

Chinese banking regulators also

pledged to speed up their review of

plans by Taiwanese lenders to open

new branches or outlets in China, Fan

said.

Taiwanese lenders would also be

allowed to apply to set up branches in

Chinese towns and villages, and

enjoy more favorable terms for

expansion in designated areas, Fan

said, adding that these terms are not

available for other foreign banks.

24/27

Beijing also agreed to work out a

mechanism to allow yuan to flow

back to China more easily, Fan said.

Meanwhile, Minister of Finance

Chang Sheng-ford said yesterday that

Taiwan’s state-owned banks will not

sell their shares to Chinese banks.

He added that state-owned local

banks are not interested in buying

shares of Chinese banks.

However, Chang said the

ministry could not rule out that

Chinese banks might buy shares in

the state-owned Chang Hwa

Commercial Bank through the stock

market, which raised concerns from

lawmakers in the Finance Committee

yesterday that Chinese banks may

grab management rights of

government-run banks in Taiwan.

(Apr. 2, The Taipei Times)

Activity Reports

CIECA had already sent

congratulatory message to several

counterparts on their respective

national days, namely, Bulgaria

National Day on March 3, Ireland

National Day on March 17, Greece

National Day on March 25,

Bangladesh National Day on March

26.

A simple but delightful lunch

was organized at a restaurant nearby

CIECA’s office on March 15 to

celebrate the birthday of 2 staff

members, namely Ms. Tiffany Chien,

who is in charge of bilateral meetings

with European countries, and Ms.

Chun-Chu Cheng, who is in charge of

financial and accounting affairs.

National Day in March

Birthday celebration of March

Republic of China

25/27

General Information

Land Area 36,193 sq. km Population 23.3million (1/2013)

Capital Taipei Population of

Capital

2.65 million (12/2011)

National Day October 10 Country Code 886

Currency New Taiwan Dollar Exchange Rate

per USD

US$1=NT$29.44 (1/2013)

Languages Mandarin, Taiwanese, Hakka, Indigenous languages

Religions Buddhism, Taoism, Christianity, Islam

Participation

in IGOs

Member:

1. APEC (Asia-Pacific Economic Cooperation) since 1991

2. WTO (World Trade Organization) since 2002

3. ADB (Asian Development Bank) since 1966

Observer:

1. WHA (World Health Assembly of World Health Organization) since 2009

2. OECD (Organization for Economic Cooperation and Development) –

Competition Committee since 2002, Steel Committee since 2005,

Fisheries Committee since 2006

Government

Head of State President MA Ying-Jeou

Cabinet Premier Minister JIANG Yi-huah, Minister of Foreign Affairs David Y. L.

LIN, Ministry of Economic Affairs Chang Chia-juch, Minister of Finance

Sheng-Ford CHEN

Structure The ROC government is divided into central, provincial and municipal, as

well as county and city levels.

The central government is consisted of the Office of the President and 5

branches (called “Yuan”) - the Executive Yuan (Cabinet), the Legislative

Yuan, the Judicial Yuan, the Examination Yuan, and the Control Yuan.

The Cabinet is headed by the Premier, who is appointed by the President

of the R.O.C.

Major Political

Parties

Kuomingtan (KMT), Democratic Progressive Party (DPP), People First

Party (PFP)

Economic Statistics of 2012

GDP US$464 billion Economic Growth

Rate

1.25%

GDP per capita US$20,374

US$20,006(2011)

Consumer Price

Inflation

1.93%

1.42%(2011)

Unemployment Rate 4.24%

4.39% (2011)

Republic of China

26/27

Major Industries electronics, communications and information technology products,

chemicals, textiles, iron and steel, machinery, cement, pharmaceuticals

Exports US$301 billion (-2.3% of the same period of 2011)

Taiwan is the 18th

largest exporter among major countries.

Major Export

Items

Electronic integrated circuits, Liquid crystal devices, Petroleum oils and

oils obtained from bituminous minerals (non-crude), Telephone sets and

other apparatus for transmission or reception of voice and images,

Diodes, transistors and similar semiconductor devices, Printed circuit

Major Export

Markets

China, Hong Kong, U.S., Japan, Singapore, Korea, Vietnam, Malaysia,

Germany, Philippines

Imports US$270 billion (-3.8% of the same periode of 2011)

Taiwan is the 18th largest importer among major countries.

Major Import

Items

Electronic integrated circuits, Petroleum oils and oils obtained from

bituminous minerals (crude and non-crude), Machines and apparatus of a

kind used solely or principally for the manufacture of semiconductor

boules or wafers, semiconductor devices, electronic integrated circuits or

flat panel displays; machines, Petroleum gases and other gaseous

hydrocarbons, Coal; briquettes, ovoid and similar solid fuels

manufactured from coal

Major Import

Markets

Japan, China, U.S., Korea, Saudi Arabia, Australia, Germany, Malaysia,

Singapore, Kuwait

Foreign Reserve US$401.89 billion (until 3/2013)

Outward FDI US$3.7 billion (2011)

US$8.0 billion (2012)

US$1.0 billison(1-2/2013)

Inward

Investment

US$4.9 billion (2011)

US$5.5 billion (2012)

US$0.4billison(1-2/2013)

Foreign Direct

Investment

Stock: US$59.8 billion (2012)

Inward Foreign Investment: US$3.68 billion (2012)

FTAs signed with

Trading Partners

1. FTA between the Republic of China (Taiwan) and the Republic of

Panama – August 21, 2003

2. FTA between the Republic of China (Taiwan) and the Republic of

Quatemala – September 22, 2005

3. FTA between the Republic of China (Taiwan) and the Republic of

Nicaragua – June 16, 2006

4. FTA between the Republic of China (Taiwan), the Republic of El

Salvador, and the Republic of Honduras – May 7, 2007

5. Economic Cooperation Framework Agreement (ECFA) – June 29,

2010 Sources: MOFA; Bureau of Foreign Trade, MOEA; Investment Commission, MOEA; EIU; National

Statistics R.O.C; Dept. of Statistics, MOEA

27/27